Proportional representation and income inequality
PR gives ordinary citizens a greater voice and one might expect that to be reflected in indicators of income inequality.This expectation is borne out by the research.
In Lijphart’s second edition (2012) of his groundbreaking work on electoral systems and democracy in 36 countries over 55 years, he found that found that countries with proportional systems had considerably lower levels of income inequality. Lijphart also found that countries with PR spent an average of 4.75% more on social expenditures than majoritarian democracies.
Birchfield and Crepaz (1998) found that “consensual political institutions (which use PR) tend to reduce income inequalities whereas majoritarian institutions have the opposite effect.” The results of the regression work they present were highly significant, with PR accounting for 51% of the variance in income inequality among countries.
The authors explain this result in terms of the higher degree of political power of people in PR systems.
In their words:
The more widespread the access to political institutions, and the more representative the political system, the more citizens will take part in the political process to change it in their favour which will manifest itself, among other things, in lower income inequality. Such consensual political institutions make the government more responsive to the demands of a wider range of citizens.
Vincenzo Verardi (2005) in a study of 28 democracies, also found that when proportionality increases, inequality and poverty decreases.
Iversen and Soskice (2006) found that PR is associated with greater efforts to promote income redistribution.
Investigating the broader impact of PR on society, Carey and Hix (2009) looked at 610 elections over 60 years in 81 countries and found that PR countries garnered higher scores on the United Nations Index of Human Development, which incorporates health, education and standard of living indicators. Carey and Hix consider that the Index of Human Development provides “a reasonable overall indicator of government performance in the delivery of public goods and human welfare.”
Iversen, T., & Soskice, D. (2006). “Electoral Systems and the Politics of Coalitions: Why Some Democracies Redistribute More Than Others. American Political Science Review 100-2: 165–81.
Lijphart, Arend (2012). Patterns of Democracy. Government Forms and Performance in 36 Countries. New Haven, CT: Yale Press (Click here for Fair Vote Canada’s summary of Lijphart’s book).
Carey, John M. and Hix, Simon (2009). “The Electoral Sweet Spot: Low-magnitude Proportional Electoral Systems.” PSPE Working Paper 01-2009. Department of Government, London School of Economics and Political Science, London, UK.
Birchfield, Vicki and Crepaz, Markus (1998). “The Impact of Constitutional Structures and Collective and Competitive Veto Points on Income Inequality in Industrialized Democracies.” European Journal of Political Research 34: 175-200.
Fair Vote Canada (2018). “Why Proportional Representation? A Look at the Evidence.”
Verardi, Vincenzo (January 2005). ”Electoral Systems and Income Inequality.” Economics Letters, 86-1.